Rha Deok-yeon, the key figure in the stock plunge tied to SG Securities, filed a damages suit against former DaouKiwoom Group Chairman Kim Ik-rae and others, but it was rejected. The court dismissed Rha's claim and ordered the plaintiff to bear the litigation costs.
The Seoul Central District Court Civil Division 22 (Presiding Judge Park Jeong-ho, Director General) on the 10th ruled against the plaintiff in a damages suit filed by Rha's side against former Chairman Kim, Kiwoom Securities, Seoul City Gas Chairman Kim Young-min, and Seoul Gas.
Rha's side filed the suit in Dec. 2023. Rha's side argued that contract for difference (CFD) positions linked to Kiwoom Securities triggered the stock collapse and that former Chairman Kim was behind it. The contention was that Kim colluded with other forces to cause the so-called "wave of limit-downs" and took profits, and therefore must compensate for damages from market manipulation.
Just before the plunge, on Apr. 20, 2023, former Chairman Kim disposed of 1.4 million shares of Daou Data, or 3.56% equity, through a block trade after hours, placing him at the center of suspicion. However, prosecutors ultimately decided not to indict Kim.
The stock plunge tied to SG Securities refers to the Apr. 24, 2023 incident in which a flood of large sell orders came through SG Securities' desk, causing the share prices of eight stocks, including Daou Data and Seoul Gas, to tumble at once. During this process, suspicions of market manipulation by Rha and associates also surfaced.
Rha was indicted on charges that, together with accomplices, from Jan. 2019 to Apr. 2023 he ran an unregistered investment advisory firm, drew in investment funds, and drove up the shares of eight listed companies through coordinated trades and other methods, obtaining illicit gains of about 730 billion won. He is also accused of using customer-name CFD accounts to conduct proxy investments and settle profits, defrauding more than 194.4 billion won.
In the appellate trial last November, Rha was sentenced to eight years in prison, fined 146.51 billion won, and ordered to forfeit about 181.55831 billion won. Both Rha and prosecutors appealed, and the case is now pending before the Supreme Court.